The binary switch gene Sex-lethal (Sxl) gene plays a central role in the somatic secual development of D. melanogaster. The special importance of Sxl in this developmental pathway may be illustrated by considering the three central themes of developmental biology: 1) Pathway initiation: What mechanisms enable a cell (or a group of cells) to chose between alternative pathways? 2) Determination: After a pathway selection, what mechanisms ensure a stable commitment to the choice? 3) Differentiation: What mechanisms ensure the proper elaboration of the pathway? Sxl is, perhaps, unusual among known developmental loci in that it functions in fly sexual development in all three of these processes. It is the target for the X/A counting system which is responsible for choosing between female and male identity. Female development is selected by activating Sxl, whole male development is chosen by keeping Sxl off. Once the appropriate pathway has been selected, Sxl ensures that this choice is properly remembered during the remainder of the life cycle. In females, an autoregulatory feed back loop keeps the Sxl gene on state, and this ensures a stable commitment to female identity. Conversely, pathway choice in males is remembered by keeping the Sxl gene off. Finally, Sxl orchestrates sexual differentiation by regulating, either positively or negatively, several gene cascades that control different aspects of sexual development. The research in this proposal is divided into two main parts. The first focuses on the role of Sxl in somatic sexual differentiation; how does Sxl ensure that the pathway choice is remember and properly executed? The second part focuses on how the X/A counting system regulates the initial activation of Sxl.